Abstract
Food banks throughout the U.S. provide nutrition to the needy. Yet the
food that is distributed through food banks often originates with donors - large
manufacturers or distributors - far from those needy clients. How that food is
distributed to food banks across the country is the subject of this essay. An
informal description is given of an innovation introduced in 2005 by Feeding
America (at the time the organization was called America’s Second Harvest)
that would better allow food bank preferences to be reflected in their allocations.
Specifically, Feeding America transitioned from the centralized allocation
process, where they would make decisions based on their perception of
food bank need, to one where local affiliates would bid for food items. To do so,
Feeding America constructed a specialized constructed currency called “shares”
that are used to bid on loads of donated food. The process by which this change
came about, its necessary idiosyncrasies, and its outcomes are described.
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Scott Kominers pointed me to an earlier news article on the paperWhat happens when America's Soviet-style food banks embrace free-market economics?

"Initially, there was plenty of resistance. As one food bank director told Canice Prendergast, an economist advising Feeding America, "I am a socialist. That's why I run a food bank. I don't believe in markets. I'm not saying I won't listen, but I am against this." But the Chicago economists managed to design a market that worked even for participants who did not believe in it."